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Sunday, September 24, 2023

Smuggling in Pakistan continues unabated

The Federal Board of Revenue experienced a loss of Rs 310billion from smuggled goods from 5 sectors including recent influx of smuggled Iranian dairy products.

The dairy industry in Pakistan was caught by surprise when the shelves of retail markets were found stocked with smuggled, non-compliant, Iranian cream. The industry raised concerns over this as to how the Iranian cream was finding its way into the high and low-end markets in the country.

This is especially surprising as the smuggled non-compliant products have found their way into the major cities and even the capital.

The Chief Executive Officer of the Pakistan Dairy Association (PDA), Dr. Shehzad Amin, while expressing his concern over the matter, said that “Smuggled Iranian cream is visible in retail stores of Karachi, Sukkur, Islamabad, Lahore, Sargodha, Peshawar and Jhelum,”.

Products other than Iranian cream include UHT liquid milk, dairy cream, flavored milk, etc., and are significantly priced lower than locally produced products, he said, causing a loss to the national exchequer. Despite the legal requirements to check imported processed products per local standards, these products still made their way in the local markets.

Pakistan needs to control this penetration of cheap products into its market. Strict border monitoring needs to be instigated as the penetration of these products poses a serious threat to the national exchequer.

The inflow of smuggled products through grey channels is a huge setback to the local manufacturers as cheap unregulated products are readily available to the consumers at relatively modest prices. The smuggled milk be purchased at a Rs. 100-115 per liter whereas the locally manufactured milk costs around Rs. 160 forcing traditional buyer to make a typically buyer’s decision.

The Federal Board of Revenue experienced a loss of Rs 310billion from smuggled goods from 5 sectors including recent influx of smuggled Iranian dairy products.

Members of the Pakistan Dairy Association have raised concerns regarding the recent development and the imposition of taxes which have bumped up the prices of indigenously produced and manufactured products.

Read more: In a major people friendly move, government reverses increased taxes on dairy industry!

The sale of unregularised products in the market can also pose a severe health risk, especially in children. And in a country where malnutrition is so prevalent, with approximately 49.1 percent of children under the age of five malnourished, any increase in non-compliant food products would only spell disastrous implications.

The federal government needs to enforce that all imported dairy products are compliant as per local standards and at par with locally regulated dairy products for the promotion of fair business practices and better safety and health standards in the country.

The scourge of smuggling has plagued the country for a long time. Although numerous efforts have been made by the preceding and the incumbent government to curb the inflow of smuggled goods into Pakistan, the issue largely persists and continues to eat away at the economy.

The volume of smuggled goods in Pakistan has increased manifold over the years. In terms of value as a share of Pakistan’s GDP, smuggling went up to 11.25 percent in 2018. The smuggled goods in Pakistan, according to a report by dawn, amount to $3.3 billion per year.

Read more: Dairy Tech: Punjab Government launches “Milk Vending Machine”

Smuggling continues unabated because the customs and regulatory departments suffer from a severe lack of resources, manpower, and capability. Pakistan needs to redirect its efforts to tackle the issue of smuggling, which has plagued the economy for many decades.